KESM is involved in the provision of semiconductor burn-in services, assembly of electronic components & testing of semiconductor integrated circuits. KESM's recent performance reflects the slow growth in the semiconductor sector, with its latest results showing a small drop in both turnover & net profit when compared to the preceding quarter. Nevertheless, they are much better than the previous year's corresponding quarter.
KESM’s net profit for the last 4 quarters has increased by 18.9% to RM14.9 mil when compared to the preceding 4 quarters. This was achieved on the back of a 5.7%-increase in turnover to RM176 mil. EPS has also increased by 15.3% to 34.6 sen (see the table below). Based on yesterday (Dec 4)'s closing price of RM1.78, KESM is trading at a PE of 5.1 times.
Chartwise, KESM' share price has been dropping from its high of RM3.60 recorded in Nov 2003. Its recent lows are about RM1.48/50 recorded in last Aug/Sep. A downtrend line can be easily drawn, with the breakout level at RM1.80 (see the chart below). At 10.30 a.m. this morning, KESM's price is at RM1.81 but volume is still quite small at 210 lots traded. With the slight uptick in the volume traded in the past few days, there is a fairly good chance that KESM is about to breakout of its downtrend line.
Based on reasonable valuation & a possible breakout of its downtrend line, KESM is a stock worth tracking. If the breakout is confirmed over the next day or two, I believe KESM will be a good investment.
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